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gender pay gap
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Luxembourg: Publications Office of the European Union, 2013
ISBN: 978-92-79-29690-1 doi: 10.2838/22962 © European Union, 2013 Reproduction is authorised provided the source is acknowledged.
Printed in Belgium Table of contents What is the gender pay gap? 2 What are the main causes of the gender pay gap? 5 What are the benefits of closing the gender pay gap? 8 Map of the gender pay gap in EU-27 10 What is the EU doing? 13 How to close the gender pay gap at national level? 17 References and further information 23 What is the gender pay gap?
The gender pay gap is the difference between men’s and women’s pay, based on the average difference in gross hourly earnings of all employees.
On average, women in the EU earn around 16 % less per hour than men1. The gender pay gap varies across Europe. It is below 10 % in Slovenia, Poland, Italy and Luxembourg, but wider than 20 % in the United Kingdom, Slovakia, Czech Republic, Greece, Germany, Austria and Estonia2. Although the overall gender pay gap has narrowed in the last decade, in some countries the national gender pay gap has actually been widening (Latvia, Portugal).
The gender pay gap exists even though women do better at school and university than men. On average, in 2012, 83% of young women reach at least upper secondary school education in the EU, compared to 77.5 % of men. Women also represent 60 % of university graduates in the EU3.
What is the effect of the gender pay gap over a lifetime?
The impact of the gender pay gap means that women earn less over their lifetimes; this results in lower pensions and a risk of poverty in old age. In 2011, 23 % of women aged 65 and over were at risk of poverty, compared to 17 % of men4.
What are the differences between how women and men work?
The overall employment rate for women in Europe is 62.4 %, compared to 74.6 % for men aged 20-64.
Women are the majority of part-time workers in the EU, with 32.6 % of women working part-time against only 9.5 % of men5. This has a negative impact on career progression, training opportunities, pension rights and unemployment benefits, all of which affect the gender pay gap.
How is the gender pay gap measured in the EU?
The gender pay gap is shown as a percentage of men’s earnings and represents the difference between the average gross hourly earnings of male and female employees. Gross earnings are wages or salaries paid directly to an employee before any deductions for income tax and social security contributions are made. In the EU, data on the gender pay gap is based on the methodology of the Structure of Earnings Survey (SES).
In the EU, the gender pay gap is referred to officially as the ‘unadjusted gender pay gap’, as it does not take into account all of the factors that impact on the gender pay gap, such as differences in education, labour market experience, hours worked, type of job, etc. Even when these factors are taken into consideration, more than half of the gender pay gap remains unexplained.
Using hourly pay as a basis for calculating the gender pay gap can also mask specific differences in pay that go unrecorded, for example, bonus payments, performance-related pay or seasonal payments.
Boy or girl, equal opportunities?
These babies are born with equal opportunities, but the educational and career expectations for boys and girls are different. By the time they grow up, the boy will be earning on average 16.2% more than the girl.
What are the main causes of the gender pay gap?
The gender pay gap is a complex issue caused by a number of interrelated factors.
It still exists today due to wider gender inequalities across the economy and in society.
Discrimination in the workplace In certain cases, women and men are not paid the same wages although they carry out the same work or work of equal value. This may be the result of so-called ‘direct discrimination’ where women are simply treated less favourably than men. Or it may be due to a policy or practice that, although not designed to discriminate, results in unequal treatment between men and women. Both types of discrimination are prohibited under EU law, but are unfortunately still present in some workplaces.
Different jobs, different sectors Women and men carry out different jobs and often work in different sectors. In the health and social work sector alone, women make up 80 % of all workers. Sectors where women are in the majority have lower wages than those dominated by men.
As women bear the burden of unpaid work and childcare they tend to work shorter hours.
They also generally work in sectors and occupations where jobs are compatible with their family responsibilities. As a result, women are more likely to work part-time, be employed in low-paid jobs and not take on management positions.
Workplace practices and pay systems Women and men are affected by different workplace practices, such as access to career development and training. Different methods of rewarding employees (for example, through bonuses, allowances and performance-related pay), as well as the actual structure of pay systems, can result in different rates of pay for female and male workers.
Often this discrimination arises because of historical and cultural factors that impact on how wages are set. This so-called ‘glass ceiling’ prevents women from reaching the highest paid positions.
Undervaluing of women’s work and skills Women’s skills and competences are often undervalued, especially in occupations where they are in the majority. This results in lower rates of pay for women. For example, physical tasks, which tend to be carried out by men, are often valued more favourably than those carried out by women. For instance, a female cashier in a supermarket earns less than a man working in the stockroom.
When women are the majority in a small number of occupations, they receive lower wages. The opposite is true for men, as the more they dominate an occupation the higher their pay. For example, where women are clustered into female dominated occupations, such as cleaning, they tend to earn less than men who have comparable skills in male dominated occupations, such as refuse collection.
Women’s skills are often undervalued because they are seen to reflect ‘female’ characteristics, rather than acquired skills and competences. For example, a female nurse earns less than a male medical technician, even though they have comparable levels of qualifications. This can result in a gender bias in the setting of wages and in assessing the value of the work that women do.
Few women in senior and leadership positions Women are under-represented in politics and in the economy. Only 32% of scientists and engineers across Europe are women. Even in those sectors dominated by women they are under-represented in senior positions, in particular at the top level. Women only make up 15.8 % of board members in the biggest publicly-listed companies across the EU and only 3.3 % of the chairs of boards6.
Gender roles and traditions Gender roles and traditions shape women’s and men’s roles in society from a very early age. Traditions and gender roles may influence, for example, the choice of educational path taken by a young man or woman. These decisions are affected by traditional values and assumptions about working patterns. Research shows that women in senior positions in typically ‘feminine’ careers are paid substantially less than women working at the top in typically ‘masculine’ careers7.
Balancing work and family responsibilities Women work shorter hours and often part-time in order to combine their family responsibilities with paid work.
Opportunities for women to progress in their jobs and receive higher pay are also affected by their family responsibilities. The gender pay gap widens when women have children and when they work part-time. In 2010, the employment rate for women with dependent children was only 64.7% compared with 89.7% for men with children8.
Women spend more time than men carrying out domestic and care work, and few men take parental leave or work part-time. While men work longer hours than women in the workplace, if women’s paid and unpaid working hours are combined they are significantly longer than men’s.
What are the benefits of closingthe gender pay gap?
Creating a fairer and more equal society Greater equality between men and women would bring benefits to the economy and to society in general. Closing the gender pay gap can help to reduce levels of poverty and increase women’s earnings during their lifetimes. This not only avoids the risk of women falling into poverty during their working lives, but also reduces the danger of poverty in retirement.
Supplying quality jobs Women have rising expectations for their working lives and, if companies want to attract the best talent, equality at work is a must. It is essential to creating quality jobs and a highly-motivated workforce. Quality jobs, in turn, are crucial to building a positive working environment where all workers are valued for their work.
Good for business, workers and the economy Employers can benefit from using women’s talents and skills more effectively, for example by valuing women’s skills and through introducing policies on work-life balance, training and career development.
Women have skills and talents that are often under-utilised in the workplace and unlocking these can help companies tackle skills shortages. Valuing women for the work that they do and rewarding their skills and potential fairly can improve a business’ performance and effectiveness. For example, by encouraging the recruitment and retention of the best and most talented staff, reducing absenteeism and creating a positive image with customers.
Companies that build equality plans and strategies into their workplaces create the best workplaces for everyone, male or female, to work in. Having a positive working environment helps a business to attract customers, improve performance and boost competitiveness. Workers who feel more confident and valued for the tasks they carry out are also more likely to be innovative and productive at work.
Avoiding litigation and complaints Ensuring that employees receive equal pay for work of an equal value in an organisation means that employers avoid complaints being made about discrimination and unfair work practices. This prevents time and money being spent on dealing with complaints and any subsequent litigation.
A basis for economic growth and recovery It is important as Europe emerges from the current economic crisis to keep the issue of gender equality and the closing of the gender pay gap alive. Gender equality is a key for achieving employment growth, competitiveness and economic recovery. It is vital that equality is not undermined as cuts are made across the labour market.
Map of the gender pay gap in EU-27 Across the EU economy women earn on average around 16 % less than men.
What is the EU doing?
Equality between women and men is a fundamental right of the EU. It is also a necessary condition for achieving the EU’s objectives of economic growth, employment, social cohesion and competitiveness.
Closing the gender pay gap has long been a priority for the EU. The EU’s pledge to close the gap dates back to the Treaty of Rome in 1957. Today a legal basis for EU action exists under the Treaty of Lisbon, together with the commitment to gender equality found in the Charter of Fundamental Rights.
EU action goes beyond legislation though. It also seeks to change attitudes to gender roles – in schools, in the home, in the workplace and in society in general.
Communication on the gender pay gap, 2007 The European Commission’s 2007 Communication on the gender pay gap proposed a series of actions to tackle the gender pay gap. These included the better application of existing legislation, fighting the gender pay gap in employment policies, promoting equal pay among employers and through social partnership, and supporting the exchange of good practices across the EU.
Strategy for equality between women and men, 2010-2015 Closing the gender pay gap through legislative and non-legislative measures is a core objective of the European Commission’s ‘Strategy for equality between women and men (2010-2015)’. The Strategy sets out actions in five areas: the economy and labour market; equal pay; equality in senior positions; tackling gender violence; and promoting equality beyond the EU.
Directive on Equal Pay for Work of Equal Value The principle of equal pay for equal work or work of equal value has been enshrined in Treaties since 1957 and is incorporated in the Directive 2006/54/EC (Recast Directive).
One of the Commission’s priorities for the coming years will be to monitor the correct application and enforcement of the equal pay provisions of the Directive 2006/54/EC9 and to support employees, Member States and other stakeholders by providing guidance on the proper enforcement and application of the existing rules. In this context, the Commission is currently preparing a report on application of the Directive 2006/54/EC.
This report will focus in particular on assessing the application of the provisions on equal pay in practice. It will include an overview of the landmark EU case-law on equal pay. It will also include non-binding guidance on job classification schemes.
Closing the gender pay gap – an EU priority Gender equality and making better use of women’s talents and skills are central to closing the gender pay gap and to achieving the objectives of the Europe 2020 Strategy, the EU’s growth strategy for the coming decade. The Strategy aims to create more and better jobs, to achieve a higher employment rate for women as part of the overall employment target of 75 % for all 20-64 year-olds, and to ensure that there are 20 million fewer people in or at risk of poverty and social exclusion by 2020.
Reducing the gender pay gap is a priority identified in a range of policy areas.